by High POINT — So maybe the Manwah surcharge decrease was an anomaly.
In the days following our coverage of Manwah USA’s “Surcharge Decrease Day,” Home News now has obtained five letters from suppliers — all upholstery sources — announcing plans to do basically the opposite by raising prices and/or surcharges by a range of four to seven percentage points, perhaps to get ahead of the unpleasant news before the High Point Market starts this week.
The reason for their moves vary but basically boil down to unrelenting inflation across materials and services with no end to the nightmarish scenario in sight.
“With a global supply chain in disarray, raw material costs and lead times are more volatile than ever,” Jackson/Catnapper tells retailer’s in an Oct. 5 letter announcing another surcharge another surcharge increase of five percentage points, which raised the rates on dealers to a range of 28.5% to 32%.
It offered a “small snapshot” of how its owns costs have been impacted since the pandemic began: container pricing up 400%; OSB/plywood up between 200% and 300%; increased currency exchange rate costs; foam up 70%, domestic freight up 50%, metal parts up 30%; and labor costs up 25%.
“Unfortunately, there does not appear to be signs of relief on the horizon,” Jackson said, adding, “in the spirit of full disclosure it is likely that more pricing actions will follow before the end of the year.”
In May Franklin announced a surcharge increase to 22% due to rapid price escalation of components. Since that time, it tells dealers in an Oct. 6 letter, it has seen “plywood costs hold steady at double the pre-pandemic price and more price increases on steel, foam and freight. Despite its best efforts to offset the extra costs with production efficiencies, Franklin said it no longer can absorb the increase as it announced new SKU-specific price increases effective with shipments beginning Nov. 1.
On the positive side, Franklin’s President and Chief Operating Officer Mark Franklin added the company has been able to increase capacity over the past several weeks, and “We are making positive strides in reducing our unprecedented backlog for the first time in over 16 months.”
Leather Italia, in its Oct. 6 letter, announced an ocean freight surcharge increase to 26% for all shipments to its Leland, N.C., and Rancho Cucamonga, Calif., warehouses. That’s up from a 19% surcharge previously and on top of a 10% tariff surcharge, a retailer told HNN.
“Our long-term partnerships in the logistics industry have helped mitigate ocean freight costs, but no one in any industry is able to fully eliminate the impact of these rising costs,” it said, adding that it will be monitoring the surcharge and adjusting it monthly.
As previously reported, HomeStretch upped its tariff surcharge to 26% from the previous 22% effective with shipments beginning Nov. 1, citing raw materials and freight costs that have spiraled up over the past 60 days.
And Southern Furniture Inds., let retailers know hikes were coming for dealers of its Southern Motion and Fusion Furniture brands in an Oct. 1 letter. For Southern Motion, the “price adjustments” were by SKU and would not affect any customer sold orders tagged in its backlog as of Oct. 8. Fusion prices will reflect a 4% increase rounded up to the nearest $5, it said.
In May, Southern last communicated with retailers this way, “we were hopeful that we were on the backside of the pandemic with the deployment of multiple vaccines,” said President and CEO Mark Weber in the latest letter. But then came a new wave of Covid, both domestically and internationally, due to the Delta variant.
These continuing supply chain disruptions along with strong global demand … has resulted in continued inflation across most material categories and especially with freight-related costs. In addition, while we have been successful adding production lines over the past year, labor costs required to retain and attract workers continue to escalate,” Weber said in a letter that could speak for nearly everyone in the industry.
Southern’s Weber added all surcharges already in place today remain in effect and that the company will monitor and adjust based on market conditions.
